A Seasoned 'Tae.Jo.I.Bang.Won'

by Hwang Junho

Published 15 Sep.2022 10:47(KST)

On the 15th, the KOSPI index and the KRW-USD exchange rate are displayed on the electronic board in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Hwang Junho] Despite the stock market decline, the stocks of the Tae·Jo·I·Bang·Won sectors (Solar Power, Shipbuilding, Secondary Batteries, Defense, Nuclear Power), which had performed well due to strong demand, have faltered, causing related Exchange-Traded Funds (ETFs) to experience significant drops.

According to the Korea Exchange on the 15th, nuclear power ETFs such as HANARO Nuclear iSelect and KINDEX Nuclear Theme Deep Search have fallen 10.27% and 9.97%, respectively, since the beginning of this month through the previous day. These ETFs recorded the largest declines after the Hang Seng Tech ETF, which invests in promising Chinese companies, and the Carbon Emission Rights ETF.

These ETFs had attracted attention alongside solar power and secondary batteries under the global green energy trend. However, major investment stocks such as Hyundai Engineering & Construction (-10.68%), Samsung C&T (-4.56%), and Doosan Enerbility (-14.0%) declined, leading to a simultaneous drop. ETFs including KBSTAR 200 Heavy Industries (9.89%) and TIGER 200 Heavy Industries (9.69%), which cover the shipbuilding sector along with Doosan Enerbility, also fell sharply.

The only defense sector ETF, ARIRANG iSelect Aerospace & UAM (-5.93%), has struggled due to declines in Korea Aerospace Industries (-13.77%) and Hanwha Aerospace (-3.56%). Solar power ETFs such as TIGER Fn New Renewable Energy (-6.39%) and KODEX K-New Renewable Energy Active (-0.99%) are also on a negative streak.

As expectations for ‘Taejoibangwon’ diminish, there are views that a new leading stock group may emerge. Lee Sangheon, a researcher at Hi Investment & Securities, predicted, "Regardless of the economic situation, investment in energy transition infrastructure such as power and national security is inevitable during the restructuring process driven by deglobalization." However, he forecasted that the leading stocks may shift from the existing ‘Taejoibangwon’ to Dae·Jeon·Jo·P·D (Alternative Energy, Power Infrastructure, Shipbuilding Equipment, Fittings, Defense).